President Obama Presents Plan for “Promise Zone” Tax Credits
In an effort to encourage economic investment in targeted geographic areas, President Obama has introduced his plan to establish “Promise Zones” to “ensure that hard work leads to a decent living for every American.” The plan includes raising minimum wage, “high quality” preschool programs, and making targeted investments while “partnering with communities to help them rebuild and put people back to work.” Importantly, the proposal also includes tax incentives “for hiring workers and tax write-offs for capital investment within the Zone.”
A FAQ has been published by the Department of Housing and Urban Development explaining that before the tax incentive can be captured, Congress must enact legislation to authorize such a credit. According to the FAQ:
The Promise Zones designation creates a mechanism for the federal government to partner with local leaders who are addressing multiple community revitalization challenges with on-the-ground technical assistance to help navigate federal programs and regulations. This intensive engagement will help communities make the most of funding that may already be available. Promise Zone designees will also receive, through upcoming federal competitive grant competitions, increased access to proven tools to help them carry out their strategies. Promise Zone designees will also receive, if enacted by Congress, employer tax incentives to create jobs for Zone residents and attract private capital to disinvested places. Altogether, this package of proven tools will help local leaders accelerate efforts to revitalize their communities.
The plan is to establish 20 zones over the next few years with the first five encompassing parts of San Antonio, Philadelphia, Los Angeles, Southeastern Kentucky, and the Choctaw Nation of Oklahoma.